Refer to the Information Provided in Table 19 -Related to the Economics in Practice on Page 393: Refer

question 56

Multiple Choice

Refer to the information provided in Table 19.8 below to answer the question(s) that follow.
Table 19.8
$$\begin{array} { | c | c | } \hline \text { Total Income } & \text { Total Taxes } \\\hline \$ 20,000 & \$ 2,000 \\\hline 40,000 & 4,800 \\\hline 60,000 & 9,000 \\\hline 80,000 & 16,000 \\\hline\end{array}$$
-Related to the Economics in Practice on page 393: Refer to Table 19.8. If income increases from $60,000 to $80,000, the marginal tax rate is

• A) 5%.
• B) 20%.
• C) 35%.
• D) indeterminate from this information.

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Definitions:

Equity Method

An accounting technique used by a company to record its investment in another company based on the equity it holds in that company.

Net Earnings

Net earnings represent the amount of profit left over after all expenses, taxes, and costs have been subtracted from total revenue.

Equity Method

An accounting technique used for recording investments in associate companies where the investor has significant influence but does not have full control.

Common Stock

A type of equity security that represents ownership in a corporation, granting holders voting rights and a share in the company's profits through dividends.